Managerial Accounting Chapter 1
The Role of the management accountant in value creation
Today’s management accountants are required to have competencies in cost management, performance measurement (financial and non-financial), process management and risk management as a result play a fey role in decision making across the various functional areas of an organization
Managerial accounting: the form of accounting concerned with providing information to managers for use in planning and controlling operations and for decision making
Financial accounting: the form of accounting concerned with providing information to shareholders, creditors, and others outside the organization
The work of managers and their need for managerial accounting information
Every organization has managers – someone must be responsible for making plans, organizing resoures, directing personnel, and controlling operations.
Managers carry out three major activities:
Planning: developing objectives and preparing budgets to achieve these objectives
Directing and motivating: mobilizing people to carry out plans and run routine operations
Controlling: ensuring that the plan is actually carried out and is appropriately modified as circumstances change
Strategy: a game plan that enables a company to attract and retain customers by distinguishing itself from competitors
The reasons a company creates for customers to choose it over its competitor is called customer value proposition
Customer value propositions fall into three categories:
Customer intimacy (i.e. Cisco systems, KEG steakhouse)
Operational Excellence (i.e. WestJet, Walmart)
Product Leadership (i.e. BMW, RIM)
Planning
An important part of planning is to identify alternatives and then to select from among the alternatives the one that best meets the organization’s objectives
I.e. Metro Coffee Inc.’s objective is to make profits for the owners of the company by providing superior service at competitive prices in as many markets as possible. When making
Today’s management accountants are required to have competencies in cost management, performance measurement (financial and non-financial), process management and risk management as a result play a fey role in decision making across the various functional areas of an organization
Managerial accounting: the form of accounting concerned with providing information to managers for use in planning and controlling operations and for decision making
Financial accounting: the form of accounting concerned with providing information to shareholders, creditors, and others outside the organization
The work of managers and their need for managerial accounting information
Every organization has managers – someone must be responsible for making plans, organizing resoures, directing personnel, and controlling operations.
Managers carry out three major activities:
Planning: developing objectives and preparing budgets to achieve these objectives
Directing and motivating: mobilizing people to carry out plans and run routine operations
Controlling: ensuring that the plan is actually carried out and is appropriately modified as circumstances change
Strategy: a game plan that enables a company to attract and retain customers by distinguishing itself from competitors
The reasons a company creates for customers to choose it over its competitor is called customer value proposition
Customer value propositions fall into three categories:
Customer intimacy (i.e. Cisco systems, KEG steakhouse)
Operational Excellence (i.e. WestJet, Walmart)
Product Leadership (i.e. BMW, RIM)
Planning
An important part of planning is to identify alternatives and then to select from among the alternatives the one that best meets the organization’s objectives
I.e. Metro Coffee Inc.’s objective is to make profits for the owners of the company by providing superior service at competitive prices in as many markets as possible. When making